What TV can learn from the move to digital music

By January 13, 2009 7 Comments

Last week I wrote that the latest online video stats show that longform content is doing well, and in response Alan Patrick pointed me to a presentation on his blog entitled The Future of Online Video – Emerging Hypotheses which contained the following chart:

It is a great presentation overall (if you like this brief version Alan tells me the longer version will go on sale soon) and I was particularly struck by chart above and the way it sets out the logical sequence of events.  Looking at the history of the music industry I think you can see a similar pattern of development – but perhaps five years ahead.

Later in the presentation that this slide is drawn from Alan characterises the current situation in TV as “old order being crushed by the free economics of the pirate services”.  That was the situation in music maybe 5-8 years ago, and more recently the pirates have been crushed in a pincer movement between legal pressure on the one side (with the closure of Napster in July 2001 probably marking the beginning of the end) and the increasing availability of what Alan would characterise as legal new order services on the other side.

The last twelve months has seen a slew of ‘new order’ music services achieving some decent success – in no particular order I would list Spotify, We7, Nokia Comes With Music, Imeem and Myspace, and then there is of course iTunes which last week broke definitively with the old order by announcing they would now stock DRM free tracks from all four major labels.

Timing is everything in venture capital and startupland.  The key to success is setting up your business in time to be ready to ride the wave of growth in your chosen industry. 

So I like this chart for what it tells us about how we should time investment into the online video space.  And remember being too early is often as bad as being too late.